RLI Earnings Beat Estimates, Revenues Improve Y/Y in Q2
RLI Corp.’s RLI second-quarter 2018 operating earnings of 60 cents per share beat the Zacks Consensus Estimate by 9.1%. However, the bottom line slipped 1.6% year over year.
RLI Corp. Price, Consensus and EPS Surprise
RLI Corp. Price, Consensus and EPS Surprise | RLI Corp. Quote
Net income improved 25.4% year over year to 74 cents per share.
The company witnessed profitable underwriting results along with improved net investment income in the reported quarter. Also, the property and casualty (P&C) insurer displayed premium growth across all its segments.
Operational Performance
Operating revenues for the reported quarter totaled $211.1 million, up 6.8% year over year owing to higher net premiums earned as well as net investment income. Also, the top line outpaced the Zacks Consensus Estimate of $208 million by 1.5%.
Gross premiums written improved nearly 12% year over year to $269.8 million on the back of a solid performance by all the segments — Casualty, Property and Surety.
Total expenses increased 10.6% year over year to $186.9 million due to higher loss and settlement expenses, policy acquisition costs, insurance operating as well as general corporate expenses.
The company reported underwriting income of $14.1 million, which declined 28.4% year over year. Combined ratio deteriorated 350 basis points year over year to 92.8%.
The property and casualty (P&C) insurer’s net investment income improved nearly 10.1% year over year to $14.6 million. Total return from the investment portfolio was 0.8%.
Financial Update
The company exited the second quarter with total investments and cash of $2.2 billion, up 1.3% from the year-end 2017.
Book value was $19.17 per share as of Jun 30, 2018, down 0.8% from the tally as of Dec 31, 2017.
Long-term debt was $149 million, which inched up 0.1% from the figure at 2017-end level.
Statutory surplus grew 7.3% year over year to $927.9 million.
Net cash flow from operations surged 33.6% to $84.6 million in the quarter under review.
Dividend Payout
On Jun 20, 2018, the company paid out a cash dividend of 22 cents per share, up 4.8% from the year-ago quarter’s payment. Over the past five years, the P&C insurer’s total cumulative dividends amounted to more than $613 million.
Zacks Rank
RLI Corp. carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Among other players from the insurance industry having reported second-quarter earnings so far, the bottom line of The Progressive Corporation PGR, MGIC Investment Corporation MTG and Fidelity National Financial, Inc. FNF beat the respective Zacks Consensus Estimate.
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